What's taking so long with the Allentown corruption investigation?

CLEM MURRAY / PHILADELPHIA INQUIRER

Federal prosecutor Joe Khan has been leading the Allentown corruption case along with Nancy Beam Winter, but sources have told The Morning Call that both have left the Eastern District of the U.S. Attorney's Office. Khan is pictured here answering reporters' questions in 2007.

Federal prosecutor Joe Khan has been leading the Allentown corruption case along with Nancy Beam Winter, but sources have told The Morning Call that both have left the Eastern District of the U.S. Attorney's Office. Khan is pictured here answering reporters' questions in 2007. (CLEM MURRAY / PHILADELPHIA INQUIRER)

While the federal corruption investigation in Allentown has dragged on for more than a year, a recent change in prosecutors may slow it down even more, leaving city leaders, workers and residents no choice but to brace for the long haul.

Joe Khan and Nancy Beam Winter, the two Philadelphia prosecutors assigned to the Allentown case, have left or are leaving the Philadelphia U.S. attorney's office, multiple sources have told The Morning Call. Other former prosecutors agree that likely spells more delays for an already slow-moving case.

"New counsel will need to get up to speed," said Robert Goldman, a former assistant U.S attorney now in private practice and representing a defendant in the Allentown case. "That could be a reason for delaying the investigation."

In a city where officials have repeatedly pleaded for a hasty end to the investigation that has cast a dark cloud over Allentown, that news is tough to swallow.

"It has to come to a conclusion, one way or the other," said Ray O'Connell, Allentown City Council president. "This is not fair to the residents of the city of Allentown."

While the FBI has gotten most of the headlines during the course of the Allentown investigation, it is the U.S. attorneys who pursue the charges.

Since 2013, FBI agents have been investigating an alleged pay-to-play scheme in Allentown involving city contracts and services that officials say were traded for campaign donations, meals and drinks. Mayor Ed Pawlowski has not been charged, but he has been implicated by six people who have pleaded guilty since FBI agents raided Allentown City Hall in July 2015, armed with a subpoena for thousands of documents on city contracts and contractors.

Allentown Mayor Ed Pawlowski, who is running for a fourth term leading Pennsylvania’s third-largest city, has been charged in federal court in a pay-to-play scheme, his lawyer said.

The charges were filed Tuesday but sealed, said Jack McMahon, Pawlowski’s attorney, adding that they will be made...

Those six defendants pointed the finger at an unnamed elected official matching only Pawlowski's description who they say orchestrated the trades. Three of the guilty pleas came from city officials: former Controller Mary Ellen Koval, former Finance Director Gary Strathearn and former assistant solicitor Dale Wiles. Also pleading guilty were engineer Matthew McTish, developer Ramzi Haddad and campaign consultant Mike Fleck, who ran Pawlowski's campaigns for mayor, governor and U.S. Senate. Sources with knowledge of the investigation say Fleck secretly recorded the mayor for the investigation.

Federal prosecutors in the Eastern District of Pennsylvania ultimately will decide if enough evidence has been gathered to pursue charges against Pawlowski and any others implicated in the investigation. Any evidence must be presented to a grand jury that would determine whether someone is indicted.

Goldman, who spent 28 years as a prosecutor, called the timing of Khan's exit "ridiculous."

"I've never seen anybody leave in the middle of an important investigation," he said.

Jennifer Rodgers, a former federal prosecutor and executive director for the Center for the Advancement of Public Integrity at Columbia University Law School, however, said Khan's departure wasn't unusual. Assistant U.S. attorneys often leave to go into private practice, which tends to pay better. In the Southern District of New York where Rodgers worked, assistant U.S. attorneys typically stayed for five to seven years, she said.

Khan's decision also doesn't seem out of the ordinary to Seth Weber, who spent 26 years as a federal prosecutor and now teaches criminal justice at DeSales University in Center Valley.

"This is a substantial political corruption case in the Lehigh Valley, but the U.S. attorney's office covers Philadelphia, Montgomery County, and other cases that involve people and players from other states," he said. "It's a big case, but probably not Joe Khan's career case. It's just another political corruption case."

Sources close to the case say Khan, an assistant U.S. attorney for the last 10 years, is leaving for private practice. Winter left the Philadelphia office several months ago for a special detail with the Justice Department in Washington, D.C., according to the same sources.

Michele Mucellin, spokeswoman for the U.S. attorney's office in Philadelphia, would not say whether Khan and Winter were leaving or who has been assigned to the Allentown investigation. However, two new names have been listed on court documents related to the case since March: assistant U.S. attorneys Anthony J. Wzorek and Michelle L. Morgan.

Wzorek recently prosecuted several Philadelphia police officers accused of roughing up drug suspects and pocketing seized cash. Morgan is known for her work on sex crimes, human trafficking and corruption cases, according to published reports.

The exit of lawyers at the helm of a case isn't ideal, but it's not as big a red flag as leaving right before a trial would be, Rodgers said.

"I'm sure they have a lot of very capable prosecutors on the case," she said "It's not as if they walk away with all the information about the case in their head."

Weber said it may be better for the new prosecutors to have Khan and Winter leave before a major indictment. That way, they can choose how to proceed, he said.

The McDonnell prism

The Allentown investigation appeared to be gathering momentum in the spring. McTish and Fleck pleaded guilty to corruption charges in April, and that same month, the U.S. attorney's office froze Pawlowski's campaign accounts, locking up money he needed to pay for defense lawyers. Just months earlier, Koval, the former controller, resigned from office and also pleaded guilty.

Pawlowski's attorney, Jack McMahon of Philadelphia, has said he expects the mayor to be indicted. But a recent Supreme Court decision may be among the things delaying the investigation, he said.

In June, the court issued a ruling in a case involving former Virginia Gov. Robert McDonnell that limited which political favors can rise to the level of political corruption. In their decision, the justices clarified the definition of an "official act" — a favor granted in exchange for a campaign contribution or gift. Now, federal prosecutors are required to show that a public official made a decision, took action or agreed to take action on a specific matter in exchange for something of value.

A public official simply setting up a meeting for a donor, for example, would not be considered political corruption, the court ruled.

Federal prosecutors will have to re-evaluate the case based on the new ruling, McMahon said.

"That has to be run through the government, the main Justice Department, and they'll have 900 meetings. …They'll put it through the McDonnell prism, whatever evidence they have," he said.

ALLENTOWN — Over the objections of Mayor Ed Pawlowski and some members of the board, Allentown City Council passed a resolution by a 5-2 vote Wednesday imploring the U.S. attorney’s office to expedite its investigation into an alleged pay-to-play scheme in Allentown.

Pawlowski also may be slowing down the case, said Kathryn Roberts, a Lehigh County defense attorney representing Wiles.

By digging in his heels and maintaining he has done nothing wrong, she said, he is making prosecutors work harder to build a case against him.

"There's probably a lot of ducks to gather," she said. "You present it all to a grand jury. They have to do it the hard way. That could take time and account for the delay."

A slowly proceeding case has ramifications for a grand jury, too, Rodgers noted. Grand juries are impaneled for a particular length of time — typically 18 months in the Eastern District — and if the investigation exceeds that time period, a new grand jury must be impaneled and brought up to speed, she said. Witnesses wouldn't have to testify before the grand jury again, but a transcript of previous testimony would have to be read into the record.

"It's a pain if you have to do a new one, but you can do it," Rodgers said.

Court documents show that the Allentown investigation dates to 2013, but because grand jury proceedings are held in secret, it is unknown when the grand jury handling the case was impaneled and whether more than one has been convened.

Also left twisting in the wind by the lengthy investigation are Allentown and its residents. City leaders already have speculated that the cloud hanging over the city has been stalling development in the city's Neighborhood Improvement Zone. Others think the investigation has scared away qualified candidates for top city positions, some of which have remained open for months after they were vacated.

Allentown City Council is in a difficult position, having to work with Pawlowski months after publicly calling for his resignation and declaring him a "detriment to the well-being of the city, its residents and city employees." In recent weeks, Pawlowski has shopped at least four candidates for the city's managing director position to various members of council, but hasn't presented any for a public vote by the board.

Now the board is trying a different tack: asking the feds to hurry up.

In a resolution to be voted on this week, City Council is urging...

"Everyone is waiting on bated breath," O'Connell said. "Please, please get this thing over with, for the betterment, if not the sake of the citizens of Allentown."

The lengthy lull also has taken a toll on those who have pleaded guilty and implicated the mayor. Sentencings for most of the six cooperating witnesses have been delayed three or four times. Recently, several were pushed back to January.

And then there's Pawlowski himself, who has endured a year with an ax hanging over his head.

The case has placed "extraordinary pressure" on the mayor, his attorney said.

"I think he's confident that he did nothing wrong, and he's holding up extraordinarily well under that type of stress," McMahon said. "It's a terrible way to live."

As the city moves into a mayoral campaign season, Pawlowski likely is weighing the investigation as he considers seeking re-election to a fourth term, said Chris Borick, a professor and pollster at Muhlenberg College in Allentown. The mayor hasn't announced a bid for re-election, but has told several people he will run, sources at City Hall have said. If an indictment were to come in the middle of the 2017 primary season, that would make re-election a lot harder for the mayor, Borick said.

"In the big picture, the longer it's delayed and ultimately nothing comes, that's wonderful news for Mayor Pawlowski," Borick said. "The only thing better would be if the feds announce that they've investigated and there's nothing there. Short of that, no news is probably best."

• How criminal cases form: Typically, the U.S. attorney's office takes the lead after FBI agents investigate and gather evidence to charge someone with a crime. Prosecutors decide if there is enough evidence to charge someone and work with FBI agents to put together a grand jury presentation.

• Grand jury testimony: Hearsay is permitted. FBI agents often are main witnesses.

• Grand jury decision: Vote is taken but doesn't have to be unanimous

Sources: U.S. Department of Justice and Jennifer Rodgers, executive director for the Center for Advancement of Public Integrity at Columbia University Law School.